Real Estate Investing in Australia
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Real Estate Investing in Australia


If you’re in Australia and you want to
know how to invest in real estate, you’re in the right place. Hey, friends. Stephen
Michael Miller here and we keep getting questions from many of you all across
the world that are saying, hey, how do I do real estate in my area? And I’m gonna
go ahead and address some of these. I’m gonna start today with Australia. A lot
of you in Australia want to know how to do real estate the best in Australia and
to be honest with you, I’ve never done real estate in Australia, we’ve done a
lot of real estate here in the US but I believe that there are some similar
things that you can be looking at when you’re looking to do real estate in
Australia and some things that you can be aware of as you’re taking steps
either to do real estate in Australia or to not. As you’re doing your research,
things that you want to be aware of before you take any steps, okay. I don’t
want to slow anyone down actually, I want to get you going faster and faster
towards your financial goals and doing the right things in real estate but for
me, as I got that question, I thought, hmm, why would I or would I not want to do
real estate in Australia? So I’ve got my computer here and I’m just doing some
some quick searches to kind of show you my thought patterns and some of the
things that I go through as I am diving in and doing some research as to maybe
why I might want to do some real estate in a specific area. So I’m right here on
Google, that one website that hopefully you’ve all heard of before, right? I just
went right onto Google, put in Australian home values and started doing some
searches and you can see right here on my computer, you’ve got several different
articles that are coming up, this one right here says home values
across Australia will continue to diverge in 2019 which means that they
are currently diverging here in 2018. What does that mean? Well that means that
all across Australia, home values are going different directions. You’ve got
some areas, I’m going to click on this site right now that listed this article
and it actually goes through different areas. In Australia, it shows that in
Sydney and in some parts of Melbourne they’re expected to continue to decline
in value so maybe not the best places to be investing right now
and in Australia Sydney and Melbourne but then you have other areas like Adelaide,
Brisbane, Canberra, hopefully I’m not completely murdering the names of
these areas, Hobart. These are expected to see further growth so some areas in
Australia and this is not unlike the US, in the US we have markets that
are going up in value, we have other markets that are declining in value and
other markets that are holding steady so you just want to be aware of which
areas that you’re going into that are experiencing those different types of
fluctuations because it’s going to determine what type of real estate you
might want to do in those areas. As I did some other search, looking into different
property bubbles that have happened in Australia, I know, you know, I looked here
on good old Wikipedia and although Wikipedia is not the end-all be-all, it’s
a good source for information. This one, this article in particular wasn’t
necessarily the most current. Although it was talking about a property bubble in
Australia, a property bubbles or things that happen in every market all across
the world, this isn’t any one country specific but I looked at the Australian
property bubble, it looks like over time, since the 1980’s or even 1990’s, property
values in Australia have been increasing fairly rapidly as a matter of fact, more
than a lot of other places around the world. It talks about, their average
growth has been around 6 or so, maybe even 7% over the last many many years
since the early 1990’s and I know that this article or this information,
some of this was was pulled in 2015 and here we are right now, it’s 2018, not
to date this video but you know we’re experiencing some as
we’ve seen some of this you in Australia, those of you that are there, you’ve
experienced a lot of this growth already. What happens with massive growth
typically is when growth exceeds the income levels, right. This is one of the
things that it’s been experienced in Australia is the the home markets, the
housing market, has grown past the income growth and right now or at least when
this article was written in 2015, you’re seeing income levels
at about, or housing value levels, six times as much as the annual income level.
That just means that people can’t afford the housing as much right so whenever
you get to a point in any market where housing becomes too expensive for the
individuals that are earning there then you’re creating a bubble that has to be
corrected at some point so that more people can actually purchase property.
We’re seeing a little bit of this, I actually, I looked to another forecast
and you can see here on my screen right now, this is the Australia house
price index and this is over, you know, the last several years from 2015 which
again, we saw in that last article that those are prices from the
1990’s up to about 2015. Well here you see from 2015 till today, you’re seeing a
general trend southward. Now we’re not seeing a massive decline necessarily but
we are seeing a difference from a house index of 4.7, now we’re down
to right now this month or the last couple months about a – 0.7. Again
so this isn’t necessary time to jump ship or stop doing you know, any type of
real estate but it is something you want to be aware of and this could be
indicating a future trend so you want to be just aware, you want to be looking at
it. Some other basic things and I want to kind of maybe go away from these
specific articles and just talk about generals right now. In all of real estate,
no matter where you’re buying real estate, there are some things that you
want to make sure that you are keeping track of, that you’re aware of as you’re
looking to get into doing real estate in your area and one of those things is, can
I buy a home that will cash flow? There are a lot of people that sidestep that
really basic rule of getting into a property that will cash flow for you. As
a matter of fact, there’s something that was really big happening in Australia
for a long time called negative obviously, negative gearing. Negative
gearing isn’t exclusive to Australia, they just call it a little bit
different than we call it America but negative gearing is basically buying a
home, going negative on that home, oftentimes
giving a interest-only loan, going negative on that home for a period of
time with the hopes or the belief that the increased property value, right, if
it’s growing at six or seven percent a year that the hope is that that
increased property value will make up for that that period of time where
you’re going negative. Negative gearing is something that a lot of investors
have done in Australia which has actually artificially inflated some of
those values and so you want to be aware of some of the things things that are
happening and my recommendation would be to never be in a situation where you
find yourself in a negative gearing type of situation and the reason for it is
because, if there is a bubble and if that bubble is ready to burst, if it’s ready
to pop at some point and you’re stuck in this negative gearing situation where
you bought a home, maybe that was worth more than you bought it for, maybe
the monthly payment on it is higher than you could afford and maybe it’s not
being covered by the rents that you’re renting it out for, if you’re in that
situation and the market continues to go in a downward slope, well then you’re
stuck, right? And those types of situations you could be stuck in a really bad
situation and find yourself losing money on the deal, maybe getting even into a
situation where you may get a bad taste in your mouth for real estate in general
because of some of the bad decisions you made so I would recommend never getting
into a situation where you’re trapped in that negative gearing type of scenario
so cash flow, cash flow is important, cash flow is king, cash today can help you to
invest in more today as well and so you want to be aware of that, you want to
make sure that you’re getting into homes that are providing a positive cash flow
for you. Now I know what a lot of people will say and I bet I’ll have individuals
that will say hey, here in Australia, you can’t find a home that that cash flow is
positive and I’ll tell you right now, if you say that to me, I’ll say two things
to you.. Number one, you’re probably wrong. I believe that across the world, no
matter where you are, most real estate runs on a bell curve and what I mean by
a bell curve is if you understand economics, a bell curve just basically
illustrates that most homes are going to be sold in the right space of
right if this is the bell curve right here and you’ve got your normal standard
deviations then most homes are gonna fall right inside of that first
standard deviation. In other words, they’re gonna be priced
at the right price, they’re gonna sell within the right timeframe and
everything is gonna go according to plan but in any situation and in any area, I
would venture to say there are always homes that are listed too high and there
are homes that are listed too low outside of that first standard deviation,
right. That outside of that that initial bell curve area so those homes that are
priced too high, they’re gonna stay on the market place, they’re gonna stay on
the market until either the market shifts or they shift, right until either
the value of the home rises to meet the price that they put on it or until
they’re willing to move their price to meet the market so those are
those homes that are priced too high. The homes though, the other side of that,
those 5% let’s say of homes that are priced too low, those are those deals
that are often snatched up extremely quickly and whether you’re in Australia
or India or UK or America or wherever you might find yourself, those homes that
are priced below the market, those are the homes that I suggest you look for
and having a belief, first of all, that those homes are even in existence, well
first of all, fuel your ability to find them so believe that they’re there and
then start looking for them and as you’re looking for them, again, you’re
looking for homes that these these are good homes, these are homes that aren’t
necessarily your fixer-uppers, these are homes that people just price below
market for whatever reason and there are a lot of reasons for that, right.
Sometimes it’s divorce, sometimes it’s is people getting a job, sometimes people
need to leave the country for whatever reasons and sometimes people are, you
know, maybe it’s a family dispute. I mean, who knows what it is, right? But there are
reasons that cause people to price their home below market value
because they want to get out of it quickly or they want to get their money
fast maybe for a different reason or a different investment and so those
homes do come up so be aware of those homes because when you can get those
homes, you’re more likely to cash flow. So that cash flow is really important and
cash flow really mix. I’ve kind of cover two things in one.. Cash flow mixed
with getting a home at a discount are two things that I would almost always
recommend when doing real estate no matter where you are so I’ll say this.. If
you’re in a situation right now, let’s just say that you’re living in Sydney
and Sydney’s home values are decreasing and you want to go buy a home in Perth
or something like that, maybe where the value of the homes are going up right
now. You can absolutely do that but maybe even ask yourself this question, do I
need to be doing real estate where I live? Is it important for me to do real
estate here in Australia if this is where I live right now
or are there things that I can plug into? Are there systems that I can plug into?
Are there people that I could potentially partner with that could help
bring my investing outside of my general area, right? Can I invest in
Europe or can I invest in America? Does that make sense and how do I do that? So
that’s what I would look into. There are a lot of different articles that you can
go online, again, just going on to Google and typing in things like, you know,
Australian home prices, Australian market fluctuations, Australian real estate
growth, you know, different things like that, you can just plug in to Google and
you’ll see different things. You see right here a home price guide for
Australia, you see a blog right here, this was written actually in April of 2018 of
this year, it says Australia home prices fall for seventh month, okay. Led by big
city so looks like we’ve had some prices falling. Actually I’ll click on that on
that real quick, that’s like this was put out by Bloomberg.com, pretty reputable
source right there and if you look at this article, it just says, you know, home
values are, they’re going down and they’ve been falling, not tons, right. Says
national housing prices fell 0.1% in April from March so this isn’t a massive
decrease necessarily but it’s something to be aware of. You see some different
charts so do some research, figure out. I think one of the biggest things that
keeps people at bay from investing either in their home town or anywhere
for that matter we get this analysis paralysis, you know.
You’ve probably heard that before. We get so caught up in all the information that
we don’t know that we’re afraid to make any move forward and if you do a quick
search, I mean I literally jumped on for five minutes or so, did a couple
searches, found a few articles, some old, some new and I feel like I’ve got a
decent taste for what’s going on right now in Australia and now granted, I’ve
got a lot of experience in America and and I’ve been able to maybe take some of
that experience and apply it to what I’m learning right now but in my mind, there
are some areas in Australia that can make a lot of sense to invest in right
now, areas that are increasing and improving. One of the things that I would
do to dig a little deeper would be to look at the economies in those specific
areas because even though a real estate area or a real estate market may be
declining in a specific area, if the economy in that area is increasing, if
people are moving into it and businesses is improving,
you know, if population is growing, that can be some great indicators that
although it may be declining right now, it will probably bounce back up, right. So
there’s things that you want to be aware of so my recommendation would be, do some
research, get in where you can, find out what markets you’re in and I think more
than all anything, regardless of what the markets are doing, if you get into a
property and it has a good equity position and if you get into a property
in cash flow starting day one, you’re already building in some great
fail-safes that can keep you above the market even if the market declines a
little bit that can keep you safe even when things are turbulent a little bit
around you so that would be my big recommendation is, do some research, get
moving, take some steps and get outside the box. Maybe after your research you
realized, man, I want to do some real estate in America. Come on, there are so
many people that are doing real estate in America from other countries, it’s
crazy to me to see how many people are reaching out to us from all around the
world right now saying, hey, we want to get involved in real estate in your
backyard and I say, hey, if that’s what you want to do, if that’s what you feel
is your next step, then come and come enjoy this,
alright. Go and find out how that could work
for you and I will say this, you know, if you are interested in finding out from
our team what that might look like then you know click the link here or in the
in the description below, click the link and talk to one of our team, see if
there’s something that we can do to help you start doing real estate today, get
outside of the fear of what’s may be holding you back and start making some
really good steps to just start crushing it in real estate so with that everyone
have a fantastic day. We’ll see you later.

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